PM promises a good year for business

The Nation

January 13, 2015 1:00 am

Meets private sector, which urged govt to lift purchasing power and help small firms

Prime Minister Prayut Chan-o-cha yesterday vowed that his government would do its best to ensure a strong economic performance this year, and told the business sector not to worry about the political situation.

During a four-hour meeting with business representatives, the PM asked the private sector to help restore confidence, deputy government spokesman Maj Gen Sansern Kaewkamnerd said.

"Political issues are also important but they should not worry much. Members of the private sector should not think only about impeachment cases and other political problems," Prayut said.

The premier invited representatives of commerce, banking, tourism, small business and energy for a meeting to update him on their concerns and needs. At the meeting, many suggestions were made on how to stimulate the economy and sustain growth in the long term.

The business sector is still unsure about the economic outlook this year due to many uncertainties and challenges, notably the global slowdown. Business leaders urged the government yesterday to be strong in implementing policies that will stimulate the economy and private consumption.

FTI chairman Supant Mongkolsuthree said after they were was "very satisfied" with their discussion with Prayut. Supant said he had proposed several measures - for the government to increase support for small and medium enterprises (SMEs) by accelerating small state projects; providing support for e-commerce; and financing by increasing loan guarantees from the Thai Credit Guarantee Corp for small businesses from the current 18 per cent to 40 per cent while educating SMEs about the right way to pay taxes and encouraging unregistered small firms to register and thus increase support coverage.

"The prime minister told around 25 representatives from the private sector to be patient with the way the economy is going right now and asked the private sector to understand, as the country's economic situation has declined in line with the world economy. And we are happy that the prime minister paid close attention to our all of our proposals," he said.

Thai Bankers' Association (TBA) chairman Boontak Wangcharoeng said he recommended the PM should push for the Business Guarantee Act that the TBA has waited 17 years for, and other electronic laws, since it could boost the effectiveness of the banking sector, allow greater financial access for small firms, while helping to drive the economy. And he believed that the law - Business Guarantee Act - could be introduced by this government.

"The prime minister has shown that he is committed to driving the country to be competitive and that is a good sign," he said.

Isara Vongkusolkit, chairman of the Board of Trade and Chamber of Commerce, said private enterprises do not envisage large growth this year because of uncertainty about a global recovery and the threat of the US raising its policy interest rate.

He said the private sector would like the government to speed up budget disbursement and budgets "in the pipeline" to promote more investment this year.

Isara said the government should delay plans to increase the value-added tax (VAT) - for some years - to ensure strong consumer purchasing power. With lower oil prices and low consumer spending at present, some manufacturers were considering lowering retail prices for goods in the near future. However, producers may need some time to adjust costs and prices because of the lower cost of fuel.

"The government does not need to force enterprises to reduce prices. They will move to lower costs if they foresee weak purchasing power, while the costs of production have also decreased," Isara stressed.

Surapong Techaruvichit, president of the Thai Hotels Association (THA), said the association wanted the government to help with three major issues. First, is to seek "quality" tourists rather than a huge number of visitors - big spenders such as business travellers, those coming for medical check-ups and healthcare or coming for niche markets.

The second issue was to strong enforcement of laws. The government should continue cracking down on people who trespass on state land and public areas. The last issue was to develop tourism products and services that are sustainable.

Commerce Minister General Chatchai Sarikulya said: "The government is confident that the Thai economy will grow by 4 per cent this year, driven by many stimulus strategies, as well as closer cooperation between government and private sector."

He said the key engines driving the economy this year would be government investment, support for trade growth - particularly cross-border trade, and the setting up of Special Economic Zones.